Bank Indonesia: Indonesia's Foreign Exchange Reserves Increase in November 2023

Indonesia's foreign exchange reserves jump in November 2023, Bank Indonesia (BI) stated in the last week.

Indonesia's foreign exchange reserve position at the end of November 2023 was recorded at 138.1 billion US dollars, an increase compared to the position at the end of October 2023 of 133.1 billion US dollars.

"The increase in the position of foreign exchange reserves was influenced, among other things, by the government's issuance of global bonds and the withdrawal of government foreign loans," said Executive Director of the Communications Department of Bank Indonesia (BI) Erwin Haryono in Jakarta, Thursday (7/12/2023).

The position of foreign exchange reserves is equivalent to financing 6.3 months of imports or 6.1 months of imports and payment of government foreign debt and is above the international adequacy standard of around 3 months of imports.

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Bank Indonesia assesses that foreign exchange reserves are capable of supporting the resilience of the external sector and maintaining macroeconomic and financial system stability.

Going forward, Bank Indonesia views that foreign exchange reserves will remain adequate, supported by maintained economic stability and prospects, in line with the policy mix response adopted by Bank Indonesia in maintaining macroeconomic and financial system stability to support sustainable economic growth.

Previously, Bank Indonesia (BI) Governor Perry Warjiyo said that foreign exchange reserves were important as self-insurance capital against global turbulence so that Indonesia maintained sufficient foreign exchange reserves through reforming foreign exchange reserve management.

"We need to have sufficient foreign exchange reserves for self-insurance. Foreign exchange reserves are self-insurance against global turbulence," said Perry.

Global economic turbulence in 2023 includes, among other things, slowing global economic growth, where there is the potential for a recession to occur in the United States (US) and Europe, high global inflation, high and longer-lasting interest rates, a strong US dollar, and tensions geopolitics.

Foreign exchange reserve management reform is intended to maintain the stability of the rupiah exchange rate and support sustainable economic growth, especially amidst global economic uncertainty and turmoil.

In reforming foreign exchange reserve management, the target is not only to have sufficient foreign exchange reserves but also to be able to manage reserves when facing asset valuations amidst fluctuating global interest rates.